New Canadian Media

By: Charles Lammam and Milagros Palacios in Vancouver 

With home prices rising across the country, many of us would likely assume that housing costs (including rent and mortgage payments) are the most expensive budget item for the average Canadian family.

In reality, however, the average Canadian household spends more on taxes than any other expense—including housing. Specifically, in 2016 the average Canadian family (including single Canadians) earned $83,105 in income and paid $35,283 in total taxes. That’s 42.5 per cent of income going to taxes.

Surprised? You’re not alone.

For most of us, the income and payroll tax deductions on our paycheques do not total anything close to this percentage. But to understand the full cost of taxation, you must consider all the taxes—both visible and hidden—that we pay throughout the year to federal, provincial and municipal governments including sales taxes, property taxes, fuel taxes, carbon taxes, import taxes, alcohol taxes and much more. All these taxes add up and make our overall tax bill expensive.
So how does the overall tax bill compare to housing costs?

The average Canadian family spends 22.1 per cent of its income on housing—only about half as much as it spends on taxes (again, 42.5 per cent).

In fact, taxes consume more of the average family’s income than all the basic necessities of life combined. If you add up the average family’s spending on housing, food and clothing in a year, it comes to 37.4 per cent of its income—still quite a bit less than what we pay in taxes.

With 42.5 per cent of income going to taxes, Canadian families may rightfully wonder whether they get good value for their tax dollars. Of course, taxes fund important government services. But we shouldn’t simply assume that higher taxes always provide better government services.

While it’s ultimately up to individual Canadians and their families to decide if they’re getting the best bang for their money, you must know how much you pay in total taxes to make an informed assessment. That’s where our annual calculations help. They estimate the cost of government for the average family. Armed with this knowledge, Canadians can then determine if they think they’re getting good value in return.

Some perspective might help.

In most provinces, more than 50 per cent of our tax dollars finance generous pay for government employees. In fact, government employees, on average, receive 10.6 per cent higher wages than comparable private-sector workers doing similar work. And that’s on top of the much more generous non-wage benefits (pension coverage, job security, early retirement) the government sector also enjoys. Of course, we need qualified and well-paid government workers, but is this pay and benefit premium the best use of our tax dollars?

In the case of health care, which consumes around 40 per cent of most provincial budgets and is a fast-growing expense, international comparisons show that, despite high levels of spending, Canadians have comparatively poor access to technology and doctors, and endure longer wait times for surgery. It’s hard to see how we get good value for our money in public health care when measured against other countries that also offer universal access.

Most troubling is when our tax dollars are outright wasted on boondoggles and failed government programs. A recent study documented more than 600 cases where the federal government failed to meet its own objectives over a 25-year period, resulting in up to $197 billion of wasted tax money.

Bottom line—if Canadians are more informed about the true cost of government, they will be better equipped to hold government accountable for how it spends our tax dollars. And that leads to a more robust public debate about the overall tax burden and whether we’re getting our money’s worth.


Charles Lammam is the Director, Fiscal Studies, at the Fraser Institute and Milagros Palacios is the Senior Research Economist at the Fraser Institute. This piece was republished under arrangement with the Asian Pacific Post.

Published in Economy

 

OTTAWA—The Trudeau government has won a round in its battle against offshore tax cheats.

Two banks have agreed to give the federal revenue minister information from the accounts of a Caribbean financial institution to help the government crack down on Canadian tax evaders.

The Federal Court of Canada has approved federal requests for seven years’ worth of transaction information from the Royal Bank of Canada and Citibank, N.A., related to accounts in the name of Cayman National Bank Ltd.

 

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Published in Economy
Saturday, 16 July 2016 08:00

New Canada Child Benefit Introduced

OTTAWA – The Liberals promised during last fall’s federal election that nine in 10 Canadian families would be better off once their new child benefit package rolls out.

Significantly better — to the tune of $2,300 annually, on average, according to the finance department’s calculations for the 2016-17 benefit year.

Is that really true?

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Published in Economy

VANCOUVER – Two  Vancouver-based South Asian tax consultant brothers are headed to jail for running a scheme which saw them give out millions in fake charitable receipts.

Fareed Mohammed Raza, 42, and Saheem Mohammed Raza, 35, have been sentenced to 51 months each after being found guilty of using a real charity as a vehicle to help their clients avoid paying nearly $5 million in taxes.

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Published in National
Wednesday, 01 June 2016 23:25

Rediscovering Toronto's Lost Chinatown

by Beatrice Paez in Toronto 

Tucked behind Toronto City Hall’s curved towers, on Elizabeth Street, is a modest patch of greenery outfitted with bright red benches and blossoming tulips. It’s from this spot — once a parking lot— that historian Arlene Chan reconstructs an image of Toronto’s first Chinatown.

Chan draws on a mix of personal history and research to inform her audience, who joined her Heritage Toronto tour of Old Chinatown on May 14.  A librarian turned writer, Chan offers a glimpse into the lives of the city’s early Chinese immigrants. 

“Why was there a Chinatown? Why was there such a tight-knit community?” asks Chan, before answering her own question. “It was because the Chinese were isolated. ”

Chinatown emerged out of necessity, with different associations providing social services, whether it came to finding a place to live or borrowing startup capital for their business, she says. 

The origins of Toronto’s Chinatown

Today’s Elizabeth Street bears little resemblance to the lively stretch it had been in the 1930s. Gone are the streetcar tracks, the destination restaurants and the Chinese-owned laundry services that made it Chinatown’s first core.

Chan takes the tour group through several stops, starting with Old City Hall, where she points to the pillars carved with faces of municipal politicians and immigrants — including the Chinese — and then coming full circle at New City Hall.

The area and its surroundings (known as The Ward) was from the 1840s to the Second World War, a gateway community for Toronto’s new arrivals. Successive waves of immigrant communities— Jews, Poles, Italians and the Irish—all passed through. 

“You live here, you’ve worked here all your life, but you’re not a citizen.”

Up until the end of the Second World War, the movement of Chinese immigrants in and out of the country had been regulated—first with prohibitive head taxes and then with documents called CI-9s, head tax certificates that were one of the first pieces of photo IDs in Canada.

“They were passports before passports were introduced,” says Lily Cho, professor at York University, in an interview. “These were documents explicitly used to identify people who weren’t given the rights of citizenship. You live here, you’ve worked here all your life, but you’re not a citizen.”

When the Exclusion Act, which banned immigration from China, was repealed in 1947, so too were CI-9s.

Canada’s adoption of the immigration point system in 1967 enabled Hong Kong entrepreneurs to invest in Chinatown at Dundas. 

Redevelopment threatens historic Chinatown

But by the 1940s, the City of Toronto began eyeing the land as a crucial site for redevelopment, the linchpin for its plans to build a new city hall and civic square. Not only was it in close proximity to the seat of government, but The Ward was also considered a slum.

Media reports depicted an unsavoury climate riddled with crime and prostitution, an area dotted with overcrowded tenements and ramshackle storefronts.

“The Ward was considered an undesirable place; it had a bad reputation,” says Chan.

The City expropriated two-thirds of Chinatown, forcing property owners to disperse or relocate their business to Dundas and Spadina streets, explains Chan.

“The Ward was considered an undesirable place; it had a bad reputation.”

“They moved to establish their new buildings and facilities nearby, but that destroyed a lot of significant landmarks,” says Jack Leong, director of the Hong Kong-Canada library at the University of Toronto, in a separate interview. 

By then, about 55 per cent of the property in Chinatown was Chinese-owned, says Chan. “People who had paid a certain amount for the real estate were not fairly compensated. They didn’t get fair market value for the land.” 

What remained was a strip of unremarkable storefronts and forgettable restaurants, with little hint of its significance as the site where most Chinese immigrants settled into their new life. 

The fight to save Chinatown 

Seen through Chan’s eyes, Elizabeth Street looms large in the imagination. It’s where her parents, Jean and Doyle Lumb, opened their famed establishment, Kwong Chow restaurant. It’s also the last frontier on which the fight to preserve Chinatown was waged.

Together with other community leaders, Jean organized the Save Chinatown Committee in 1967.

The campaign mobilized in response to the city’s intention to acquire what was left of Chinatown. Council ultimately decided to preserve what was left, which also allowed Chinatown to be extended to where it is now, says Chan.

“My strong feeling was that it was [actually] because of four restaurants that opened after the Second World War,” she says. “[They] were dramatically different than restaurants in Chinatown earlier—the pre-World War II restaurants were very small, had a very limited menu and catered to the Chinese clientele.”

The “big four” restaurants, Sai Woo, Kwong Chow, Nanking and Lichee Garden, fashioned themselves as classy restaurants that accommodated large parties, offered a Canadian take on Chinese food and provided musical entertainment.

Chinatown also began offering tours around the neighbourhood, which wrapped up with a meal at one of these restaurants.

“All of the owners were prominent members of the Chinese community,” explains Chan. “Because of their leadership and interactions with Canadian society – politicians, celebrities started going to these restaurants. It turned people’s opinions.”

“Chinatown will endure because it knows how to adapt to survive.”

Today’s Chinatown is still bound together by a shared culture and similar values, notes Leong. But Chan and Leong say that Chinatown is always in a state of flux.

Condos have steadily sprung up on the south end of Spadina, notes Chan, along with new restaurants catering to the younger crowd seeking a modern take on Chinese cuisine. Such developments don’t concern Chan, who says Chinatown will endure because it knows how to adapt to survive.

“It’s constantly changing because the community has adapted as things are happening,” says Chan. “[The change] is going to take a while. It’s going to become a hipper part of the city; it’s going to reinvent itself again.”

 

This content was developed exclusively for New Canadian Media and can be re-published with appropriate attribution. For syndication rights, please write to publisher@newcanadianmedia.ca

Published in History
Thursday, 07 January 2016 07:42

How Tax Changes Affect Newcomers

by Sukaina Jaffer in Toronto

A tax cut introduced by the new federal government looks to strengthen the middle class, but some Canadian immigrants disagree about how it will help newcomers.  

The new change will provide about $3.4 billion in tax relief to nine million individuals, according to Stéphanie Rubec, a communications officer from the Department of Finance in Ottawa. 

Canadians earning between $45,282 and $90,563 will see taxes drop from 22 per cent to 20.5 per cent. 

Single individuals who benefit will see an average tax reduction of $330 every year. Couples that benefit will see an average tax reduction of $540 annually.

A mixed bag for newcomers

Rida Zeeshan and her husband, who works as a senior analyst at CIBC Mellon, emigrated from Pakistan six months ago. They see both advantages and disadvantages to the changes.

“The government here gives more benefits to people.”

“[It’s] a good move for middle-class families who are earning above $45,000; however, it won't help lower-class families because tax rates for [the] first taxable income threshold ($45,282 or below) haven't changed at all,” Zeeshan wrote in an email interview with New Canadian Media.

According to Canada Revenue Agency’s most recent tax-filing data and income statistics for the 2012 tax year, around 66 per cent of people had income below $45,000. This group would not benefit from the tax cut.

Although she says the benefits of living in Canada are much better compared to Pakistan, Zeehan says there is no clear information available specifically for new immigrants.

“There should be a website or printed brochures that describe benefits available to new immigrants.”

Zeeshan mentions that they do not utilize any government benefits. They took advantage of just one when her husband bought professional attire through an employment centre.

As for Basim Al-Ali, who relocated from Dubai to Canada in 2011, he says he feels the taxing system in the country is fair. “The government here gives more benefits to people.” Al-Ali mentions that in Dubai, non-nationals do not pay tax.

Syed Furqan Zaidi, an inventory controller in a manufacturing company, says that by paying his taxes regularly here, he is able to take advantage of the government’s benefits, such as the child tax benefit, GST/HST premium benefit, universal childcare benefit and the Trillium benefit. He moved from Pakistan to Canada three years ago.

Volunteer tax clinics, like the one at Northwood Neighborhood Services in Toronto, are available help people complete their tax forms.

The government also intends to introduce the Canada Child Benefit – a tax-free and more generous benefit to help families raise their kids.  

Faheem Mazher, a senior tax analyst with Deloitte LLP in Toronto, says that this benefit will help families for a longer time than the previous Universal Child Care Benefit (UCCB).

In addition, the government plans to repeal income splitting for families with children. Zeeshan says this is “not a good move because this was the only tax relief available to lower-class families, which has now been relinquished.”

Tax benefits

For newcomers to Canada to be able to access benefits, income tax forms must be filed. Volunteer tax clinics, like the one at Northwood Neighborhood Services (NNS) in Toronto, are available to help people complete their tax forms.

“In a year we serve an average of 400 people whom we help to file income tax returns,” says Francois Yabit, executive director of NNS, a non-profit organization running for more than 10 years.  

This service is provided for low-income community members who qualify and assists a diverse clientele of Chinese, Spanish, South Asian and African newcomer Canadians.

The organization offers income tax clinics from March to April by appointment. However, during the year, they offer services to those who face problems such as forgetting to file their tax forms on time.

“If you do not file tax forms, then you cannot get benefits from the government,” says Yabit.

Some taxpayer benefits include the child tax benefit, GST/HST premium benefit, disability support, universal childcare benefit, medical credits, children’s fitness and art credits, tuition credits and the Trillium benefit.

While the new tax cut is set to benefit the middle-class population, it still may not help many immigrants who are struggling to make ends meet in low-income jobs.

But to ensure that one is eligible for such benefits, Mazher says newcomers need to be “transparent” and to “not cheat the system in any way, shape or form” because the Canada Revenue Agency (CRA) can enforce heavy penalties.

In addition, Mazher points out, “Many newcomers don’t realize that they have to pay taxes on overseas income.” This may include property overseas or accounts, stocks, investments and bonds that are generating interest.

Tax-filing for newcomers 

Mazher advises newcomers to retain their receipts, transit passes and donation receipts and to file their taxes even if they have no income so they can get tax credits to carry over.

He also recommends people to retain their receipts for six years in case of an audit by the CRA.  

“It is essential that tax forms be filed by the end of April or one can accrue penalties and interest from the CRA,” states Mazher.

But while the new tax cut is set to benefit the middle-class population, it still may not help many immigrants who are struggling to make ends meet in low-income jobs.

Zeeshan has a couple of suggestions for ways the government could help those who may need a little more support.

“We think the government should also introduce a tax relief or discounted tax rates for new immigrants living in Canada for two years or less,” she says.  

“This will help them to decrease their expenses and to get settled here quickly.” 


Journalist Samantha Lui mentored the writer of this article, through the New Canadian Media mentorship program.

This content was developed exclusively for New Canadian Media and can be re-published with appropriate attribution. For syndication rights, please write to publisher@newcanadianmedia.ca

Published in Economy
Tuesday, 08 December 2015 00:01

Newcomer Canadians Pay the Price for Refugees

Commentary by Khaled Salama in Toronto

Whether or not Canadians voted for the new Canadian Prime Minister Justin Trudeau, everyone will be forced to honour his promise to bring more than 25,000 Syrian refugees to the country in a span of few months’ time.

The problem with this decision is that the government alone will not be bearing the cost of this promise: that burden falls on the shoulders of Canadian taxpayers.

Canadian taxpayers will be affected in at least two major ways. One is a direct effect, as all those refugees will add an extra burden to the already encumbered health care sector. 

This means rising costs, longer wait times and more researchers to cope with the newly imported diseases and disorders that will disembark on Canadian shores with the influx of new refugees.

The other major effect will be felt by some of those taxpayers who are newcomers themselves. These new immigrants paid dearly and waited years for Citizenship and Immigration Canada (CIC) to process their landing papers as skilled workers or applicants in other categories.

They paid dearly, only to have others now jump the queue.

Impact of receiving refugees on Canadians

These new Canadians who are of non-refugee status worked hard to make ends meet. They took starter and entry-level jobs after leaving good jobs in their countries of origin to pursue their dream in Canada. 

That dream could turn sometimes into a nightmare in which families couldn’t afford to put proper food on their tables, despite working long hours at entry-level jobs.

Compare this with refugees, most of whom have heard about Canada for the first time and were recently air lifted to free food, shelter and healthcare and who will pay little to no taxes.

As a proud Canadian and an immigrant myself, I feel battered and betrayed by a government that promised change.

They paid dearly, only to have others now jump the queue.

Myself and thousands of other Canadians are actively looking for this change as well. We’re looking for a better job, better pay, fewer taxes, more time to spend with our families as well as the ultimate dream of receiving a decent pension when we retire.

But now, we have to bear a cost—an extra cost—for a decision we might not have supported and definitely were not consulted on. 

The only change we should expect is paying more for less in everything. We will pay more taxes for fewer job opportunities. We will have to work more hours to support our families and spend less time with them. Ultimately, we’ll get peanuts when it comes to pensions.

Those hard working Canadians who’ve been working for twenty or thirty years have to downsize in everything when they reach retirement age simply to make ends meet. Only in Canada does this happen.

Protecting Canada’s security

Am I against supporting refugees? Of course not. The issue is more about which refugees we should support.

Syrian refugees are not the typical kind of refugees that should be taken care of or looked after. Many of these refugees are coming from Turkey and other countries that might be a threat to our own national security.

Many of those refugees have forced their way through borders and have confronted local authorities in countries they passed.

Syrian refugees are not the typical kind of refugees that should be taken care of or looked after.


Real refugees are those that are victims of real civil wars or national disasters. 

Syrian refugees are not victims of real civil wars. They are a product of rich countries destroying other countries for their own interest, and we naïve Canadians pay and bear the cost of these actions. 

I’m simply against risky commitments to wrong people in wrong times. Canada is in a precarious economic situation and needs to protect its jobs and opportunities.

Troubling economic times

Decades ago, Canada used to export talent to the whole world. Canada used to export the best heavy machinery.

Canada used to build the best (US) cars. Canada used to brag about its efficient government services and affordable food prices.

Simply put, Canada used to be the best in many economic aspects.

Now, Canada has very few industries left, and that has left Canadians struggling to find real jobs.

I still remember when I landed here as a newcomer and travelled across Ontario and visited dozens of automotive factories. At the time, it was the dream of any Canadian to work for the automotive industries, which paid anything in a range between $28 to $45 an hour. 

I’m simply against risky commitments to wrong people in wrong times.

Now, only a handful of those factories and production lines are still there.

The government should take care of these existing economic issues and make them priorities. Instead, Trudeau pledges $100 million of taxpayers’ money this year (and the same amount next year) for processing and settling those refugees. 

I still remember a very famous national campaign that went viral towards the end of nineties that said “Out of a Job Yet? Keep Buying Foreign.”

Mr. Trudeau, you’re simply buying foreign, and very soon, you’ll keep us all out of jobs. 

This is the change you’ll make.


Khaled Salama, a bilingual writer/columnist, reports on politics, economics, tourism and social issues. As a radio and a TV anchor, Salama interviewed heads-of-states and renowned figures. Now a social worker, he's helped lots of new Canadians. He says “I’m lucky to witness chapters of today’s history before they write it differently."

This content was developed exclusively for New Canadian Media and can be re-published with appropriate attribution. For syndication rights, please write to publisher@newcanadianmedia.ca

 

Published in Commentary

By Gemma Rains The Potential Expansion of The Philippines Sin Taxes More than two years ago the Philippine Congress passed new laws (colloquially known as the ‘sin taxes’) that increase the amount of tax that the government receives from the sales of both tobacco and alcohol in the country. The purpose of these taxes were 

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Published in The Philippines

FEDERAL Liberal Party Leader Justin Trudeau on Monday announced that he would give the middle class a tax cut of seven percent. Trudeau said: “Over the past two years I have met thousands of Canadians across the country. What I have heard is clear: under Stephen Harper, middle class Canadians have had to work harder […]

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Published in Politics

Minister Findlay showcases the Community Volunteer Income Tax Program at the India Rainbow Community Services of Peel tax preparation clinic Canada’s Minister of National…

Salam Toronto

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Published in Politics
Page 1 of 2

Poll Question

Do you agree with the new immigration levels for 2017?

Yes - 30.8%
No - 46.2%
Don't know - 23.1%
The voting for this poll has ended on: %05 %b %2016 - %21:%Dec

Featured Quote

The honest truth is there is still reluctance around immigration policy... When we want to talk about immigration and we say we want to bring more immigrants in because it's good for the economy, we still get pushback.

-- Canada's economic development minister Navdeep Bains at a Public Policy Forum economic summit

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